ExciteAtHome Meets Street, Names President as New CEO

Published 4:00 am, Friday, January 21, 2000

A week after the Microsoft Corp. co- founder relinquished his chief executive title to No. 2 Steve Ballmer to focus more on long-term strategy, ExciteAtHome chief executive Thomas (T.J.) Jermoluk turned over the reins to company President George Bell for similar reasons.

Bell, who ran Excite before AtHome bought the Web portal in May, has already been running the day-to-day operations as company president. But he said yesterday's move makes it official.

Redwood City's ExciteAtHome provides high-speed Net service over cable TV lines. Since its founding in 1995, it has operated steadily in the red. But yesterday's fourth-quarter results saw the firm reporting earnings of $514,000, or less than 1 cent per share, on surging revenues. After extraordinary expenses, it lost $1.5 million.

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The move frees Jermoluk, who will remain an active chairman, to find ways to maintain ExciteAtHome's business after the expiration of its exclusive deals with cable operators. Jermoluk also plans to focus on new technologies like interactive television and Net appliances.

"T.J. and I wanted to solidify the public around the roles we played," said Bell, 43, who noted that Jermoluk will still be working full-time for the firm. "I mostly have done this job for a while."

The transition is significant, though, because it comes at a time when ExciteAtHome has been under fire for failing to find ways to blend the two firms.

Bell said the criticism isn't justified. Though the merger was announced a year ago, he points out the companies didn't close the deal until May. Plus, he said, ExciteAtHome was able to use Excite's online marketing expertise to boost subscriptions. The company now has 1.1 million cable modem subscribers, double the figure when the deal closed, and 60 percent of customer leads now come from its online efforts.

Despite AtHome's focus on high- speed Internet service, the Excite portal site is still aimed at users with pokey 56K modems. Bell says a new version of Excite, aimed at users with ExciteAtHome cable access, will launch in late March, with features such as more pictures, video and sound. (One feature that wouldn't work with slower modems: Users will be able to learn more about a news story by sliding their mouse over the headline and seeing a picture pop up.)

In April, the company will offer a version of the new site for users with other types of fast Net access, such as DSL or T-1 lines. ExciteAtHome will reserve some features of the new site for its paying cable modem subscribers.

Separately, as expected, the company eked out a quarterly operating profit for the first time. During the quarter ended December 31, the firm earned $514,000, less than 1 cent per share. ExciteAtHome promised when it went public that it would break into the black by the end of 1999. Yesterday, it said it met its promise.

But after charges for its purchase of Excite, distribution agreements and other unusual costs, it lost $1.5 million ($4.61 per share), compared with a $144 million loss (63 cents) for the same period a year ago.

Bell said the bottom line loss doesn't matter. "Most analysts look through to see if you are making an operating profit," he said.

Revenues surged 76 percent to $128.8 million.

Executives said to expect sales to continue to soar, predicting 75 percent to 85 percent growth this year.

The earnings report came after the markets closed. Shares rose 19 cents, to $42.63, in regular trading. The stock dipped to $41 in after-hours trading.